The Texas Housing Market 2020: Where to Invest

Buying rental properties in the Texas housing market has always been considered a great investment opportunity. Real estate investors from all over the US still show interest in Texas income properties, and for good reason. The Lone Star State has a large population, its laws are very friendly to investors and landlords, and there are many great areas to choose from for investing in real estate in 2020. Still, Texas is a huge state – it’s the second-largest state in the US in terms of population and geographic area. This makes it hard for investors to know where the best places to invest in real estate in Texas are.

At Mashvisor, we work to help real estate investors in the US housing market find the best investment properties for sale in the best cities of any state. To find the best places for buying rental property in Texas, we use real estate data as well as traditional and predictive analytics. This way, you can ensure that you’ll be making investment decisions based on the right numbers and calculations. To learn more about how we’ll help you make faster and smarter real estate investment decisions, click here.

So, if you’re planning to buy Texas rental properties, keep reading to discover the best cities in the Texas real estate market 2020.

The Overall Performance of the Texas Real Estate Market 2020

Before we start with our list of the 10 best cities for investing in Texas real estate, it’s helpful to understand how the Texas housing market is performing as a whole. Here’s all you need to know about Texas and why you should invest here.

#1. House Prices in Texas Are Affordable

As the real estate market recovered in many of the big cities in the US, house prices in those cities rose to levels that made it almost impossible to buy a house at an affordable price. The first good news for real estate investors is that this is not the case for Texas house prices. Even though house prices have increased in Texas over the years, they are still pretty much affordable in many areas. According to Mashvisor’s data, the median price for an investment property in Texas is $326,404 ($149 price/square foot) which, when compared to the national median, is not that expensive.

The real estate appreciation rate in Texas is also following a good upward trend. According to Zillow, home values in the Texas housing market have gone up 3.3% over the past year and it’s predicted that they will rise 3.8% within 2020. Overall, The Lone Star State is a cool housing market, which makes it a buyer’s market. These market trends are just the first of many which point to the fact that Texas is one of the best states to invest in real estate. These trends also tell real estate investors that the Texas market is predicted to heat up in the next year or two. In other words, now is the best time to buy a house in Texas to rent out for rental income so start your property search now!

#2. Texas Benefits from a Strong Economy

Another reason why you should consider Texas real estate investments is the state’s remarkable economic growth throughout the years. Texas’ economy is estimated to be worth $1.6 trillion and still growing. This strong economy is supported by a wide range of successful industries and leading universities. The Lone Star State’s economic growth is also attributed to its diverse economic base that includes agriculture, mining, and energy industries. Texas has also been successful in diversifying its economy even further by bringing in new jobs from technology, financial, and health service companies.

The business-friendly environment and favorable tax laws in Texas are the main factors that motivated 50 Fortune 500 companies to move their headquarters there. The presence of such large companies will definitely boost the state’s economy with an increase in jobs. As any successful investor knows, this is a critical factor that has a positive influence on housing and real estate investments. According to the latest Emerging Trends in Real Estate report from the PwC, Texas is one of the four states where the best class A multi-family properties are located. The other three states are Florida, California, and Arizona. Meaning, if you are financially capable of doing so, we recommend buying multi-family rentals in the Texas housing market as they are the most in-demand property type here.

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#3. Population Growth Remains Strong in Texas

The population shift in US cities is largely due to economic factors. Hence, with steady economic growth and the diverse job opportunities that Texas enjoys, it’s no wonder why people are still relocating there in 2020. Plus, the affordable housing, falling mortgage rates, and the fact that Texas has no state income tax are other reasons that encourage people to move to the Texas housing market. Since 2010, the state has had about a 4 million increase in population! These are mainly job seekers who also need housing. As a result, this only means rental properties in Texas continue to be in high demand.

While the bulk of new jobs is in the big markets, the population is increasing in many parts throughout the state. Meaning, good investment opportunities can still be found in almost all of the Texas housing markets. According to Mashvisor’s data, Texas real estate investors can expect to earn $1,532 in monthly rental income – in some cities, it’s even higher than that! This, besides the fact that Texas is known as one of the most landlord-friendly states in the US, is yet another reason why buying rental property in Texas makes for a smart real estate investment in 2020.

The Best Places to Invest in the Texas Housing Market 2020

There are a lot of mistakes that beginners in real estate investing make. One of the most common mistakes is choosing the wrong real estate market to invest in. When you’re looking at buying rental properties in a large state that offers many promising opportunities like Texas, it can be difficult to know where to start your investment property search. To help you narrow down your options, here are some of the best places for investing in Texas real estate 2020 along with their data offered by Mashvisor:

Note: The data we present below are state averages. You can find Texas income properties with higher cap rates and rental income potential using Mashvisor’s Real Estate Investment Calculator. For more details on how to use the tool, read: Real Estate Investment Calculator: What It Is and How It Works.

#1. Bishop, Nueces County

Median Property Price: $105,150
Price/Square Foot: $69
Price to Rent Ratio: 7.4
Monthly Rental Income: $1,184
Traditional Cap Rate: 5.3%

#2. Olney, Young County

Median Property Price: $103,121
Price/Square Foot: $49
Price to Rent Ratio: 8.4
Monthly Rental Income: $1,017
Traditional Cap Rate: 5.1%

#3. Mart, McLennan County

Median Property Price: $105,101
Price/Square Foot: $58
Price to Rent Ratio: 7.4
Monthly Rental Income: $1,175
Traditional Cap Rate: 4.6%

#4. Valley View, Cooke County

Median Property Price: $504,875
Price/Square Foot: $204
Price to Rent Ratio: 12.7
Monthly Rental Income: $3,299
Traditional Cap Rate: 4.6%

#5. Breckenridge, Stephens County

Median Property Price: $178,387
Price/Square Foot: $74
Price to Rent Ratio: 11.5
Monthly Rental Income: $1,290
Traditional Cap Rate: 4.5%

#6. Shenandoah, Montgomery County

Median Property Price: $300,083
Price/Square Foot: $139
Price to Rent Ratio: 11
Monthly Rental Income: $2,281
Traditional Cap Rate: 4.3%

#7. Perryton, Ochiltree County

Median Property Price: $177,800
Price/Square Foot: $86
Price to Rent Ratio: 10.3
Monthly Rental Income: $1,434
Traditional Cap Rate: 4.2%

#8. Diana, Upshur County

Median Property Price: $246,918
Price/Square Foot: $110
Price to Rent Ratio: 11
Monthly Rental Income: $1,840
Traditional Cap Rate: 4.1%

#9. Brady, McCulloch County

Median Property Price: $144,838
Price/Square Foot: $80
Price to Rent Ratio: 10.3
Monthly Rental Income: $1,162
Traditional Cap Rate: 4.1%

#10. Vernon, Wilbarger County

Median Property Price: $106,036
Price/Square Foot: $56
Price to Rent Ratio: 7.7
Monthly Rental Income: $1,146
Traditional Cap Rate: 4%

To start looking for and analyzing the best investment properties in Texas in your city and neighborhood of choice, click here.

The Bottom Line

There’s no doubt that the Texas housing market is one of the best for real estate investors in 2020. That being said, after you’ve discovered where to invest in Texas, it’s important that you also understand how to find the best houses for sale in Texas. Of course, you can always consult with a local, experienced real estate agent to guide you through the process of finding real estate deals and making an offer. But first, you also need the help of real estate investment software that’ll make your search for a Texas income property faster and efficient.

We’re talking about Mashvisor – it comes with a Property Finder and Rental Property Calculator. With these tools, you can find properties, run an investment property analysis in a matter of minutes, and then share your findings with an agent who’ll help you close the deal. Want to access our tools and give them a try? Click here to start your 7-day FREE trial with Mashvisor!

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